The Progress Of Financial Inclusion In India: Insights From Multiple Waves Of Survey Data

Author(s) Manuela Kristin Günther

ABSTRACT

How the unbanked can be brought into the financial system remains a question of policy and academic interest. India lends itself as an interesting case study. I use Pan-India data from a survey of 135,147 individuals, and another survey of 16,000 households in four of India’s lowest income states to understand the country’s trends in financial inclusion. The sample frame (2013-2015) covers a time-period before and after the introduction of the PMJDY scheme, a supply-shock led to the opening of over 260 million new bank accounts. I find that PMJDY scheme has significantly increased the likelihood of owning an account among the previously unbanked, such as the poor and uneducated. While I also observe some progress in the active use of accounts, a reversing effect for the most marginalized is less substantial. I further characterise large regional differences in the progress of financial inclusion